Great Benefits, Big Bankruptcy

March 31, 2005 by dave

This Sacramento Bee opinion piece by Peter Schrag points out a major issue in education finance, health benefits. By granting lifetime benefits, many school districts have created huge liabilities for themselves as these employees age and retire. For example, LAUSD is looking at a $5B, yep, that's "B" as in billion. That's about 80% of their annual budget. In order to meet that need, they should be putting aside $500M per year.

It isn't just the big districts either. There are local districts like Willits and Geyserville that have similar, albeit smaller, problems with lifetime health benefits. With declining enrollment, these burdens just increase. Something is going to have to give.

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